Matthew Lynn

Anneliese Dodds isn’t the woman to steer Labour back to economic sanity

Anneliese Dodds isn’t the woman to steer Labour back to economic sanity
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In some ways we will miss John McDonnell. His reheated 1970s student union Trotskyism was always an easy target for a column. From free broadband, to nationalising great swathes of industry, to raising taxes to punitive levels, and banning just abut anything he disapproved of, he managed to come up with a constant stream of terrible ideas. But, hey, never mind. Now there is Anneliese Dodds.

The new shadow chancellor may be painted in some places as representing a shift back towards the moderate centre. And yet while she may have endeared herself to working parents on lockdown everywhere with her daughter’s impromptu appearance on Sky News this morning, we should also get real about her very limited abilities. 

In truth, she is no Gordon Brown who, whatever his faults, was the economic architect of New Labour, overhauled its thinking from the bottom up, and came up with a set of credible policies that won three election victories. From what we have seen so far, all Dodds has to offer is some waffly academic wonkery and that is not quite the same thing.

Dodds faces two big problems in establishing herself in her new role, and in providing any kind of opposition to the super-smooth Rishi Sunak. 

First, her record both as an MEP and as MP suggests she is a fierce opponent of our departure from the EU. She was a big supporter of a second referendum, and steadfastly against a ‘No Deal’ departure. Towards the end of the year, if the timetable remains in place, she will no doubt be arguing for the UK to remain as closely aligned to the EU as possible. 

Of course, right now no one has any idea what sort of economy will emerge from the coronavirus crisis. There will inevitably be a deep recession, both here, and across all the developed world. But the early indications are that the inflexibility of the single currency means most of the EU will suffer even worse than we do. Italy and Spain certainly won’t be allowed to spend their way out of trouble. Die-hard Remainers are going to look even more irrelevant than ever.

Next, a glance through the archives on her website make it clear Dodds is a champion of fashionable liberal causes such as a green new deal, clamping down on offshore tax centres, increasing workers' rights, and general wokeness. 

That is very popular with the FT and the Economist, and gets some support on Twitter. But there is very little evidence it actually connects with voters. If it did, Ed Miliband would be into his second term as prime minister and Elizabeth Warren would be cruising towards the White House. And as we face a genuine recession, and people are worrying about their jobs and the survival of the companies they work for, it will be even less relevant than ever. 

True, Dodds will be far less of a threat than McDonnell. Investors won’t be losing any sleep over the thought of her as chancellor. Nor will they be getting out of sterling every time she opens her mouth. But at the same time, there is nothing to suggest she can challenge the government either intellectually or politically or make any kind of mark whatsoever.

Written byMatthew Lynn

Matthew Lynn is a financial columnist and author of ‘Bust: Greece, The Euro and The Sovereign Debt Crisis’ and ‘The Long Depression: The Slump of 2008 to 2031’

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